Any tax lawyers/accountants on here? sale of second home

[PiratePanda]

Quick question: we've finally accepted an offer on my house, which we've been trying (on and off) to sell since we got married 5 years ago.

For the purposes of capital gains tax we have made a loss, as the offer we've accepted is £20K less than I paid for it.

Do I need to fill in a self-assessment tax return this year?

Thanks!!

Was about to post something similar. We sold for £2K more than the outstanding mortgage, but £40K less than we paid for it.

We were guessing we had to do a tax return and pay tax on the £2K.

Yes you do have to do tax return

No tax paid if you sell for less than you paid for it. Your mortgage amount is irrelevant.

Ugh.

As far as I know - and better informed MNers will be along shortly - neither of you have tax to pay because you have made a capital loss. I believe the extent of the mortgage is irrelevant when considering the value of the asset.

The capital loss can be offset against any other capital gains in the same tax year, so if you have a third property or large painting or whatever stuffed in the attic that will attract a capital gain this is a good year to sell it :) I don't think it can be offset against any other tax liabilities, e.g. I don't think it has any effect on income tax from salary. HMRC info here.

I would give them a call and ask.

Thanks. I'm not worried about the tax per se as I know I made a capital loss, I just don't want to have to move over to self assessment particularly. Sigh! Guess I have no choice.

No, if you don't have any tax to pay (due to this sale or anything else) you don't need to complete a tax return if you are not issued with one. However, if you want to claim the loss so that you can use it against capital gains you might have this year or in later years you do need to claim it within 4 years of the end of the tax year of the disposal. You can do this by letter attaching a calculation. Remember to include buying and selling costs such as SDLT, estate agents and solicitors fees in the calculations.